Nations that abuse global economic order will face tough US action: Yellen
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SEOUL • US Treasury Secretary Janet Yellen said yesterday that deeper trade ties among allies could help fight inflation and thwart China's "unfair trade practices", while vowing harsh consequences for those who abuse the global economic order.
Dr Yellen made the comments during a policy speech in Seoul after touring the facilities of South Korean tech heavyweight LG Corp during the final leg of her 11-day visit to the Indo-Pacific region.
"We cannot allow countries like China to use their market position in key raw materials, technologies or products to disrupt our economy and exercise unwanted geopolitical leverage," she said.
Instead, the United States and allies like South Korea should focus on "friend-shoring", or diversifying their supply chains to rely more on trusted trading partners, strengthening economic resilience and lowering risks.
The US is pushing for closer trade ties with South Korea and other trusted allies to improve the resilience of supply chains, and avert possible manipulation by geopolitical rivals, Dr Yellen said.
Western powers have raced to end their dependence on China as a key supplier since the start of the Covid-19 pandemic, which exposed the fragility of global supply chains and laid bare gaps in domestic capacities in key sectors.
Dr Yellen also took aim at Russia over its war in Ukraine, which Moscow describes as a "special military operation", and continued to press for adoption of a price cap on Russian oil.
"Economic integration has been weaponised by Russia," she said, decrying the impact of the war on supply chain vulnerabilities, as well as logjams and shortages that have driven prices higher around the world. "We will impose harsh consequences on those countries that abuse or break that order, as we have demonstrated with our unprecedented response to Russia's aggression."
Seoul yesterday said it is willing to support US-led plans to impose a price cap on Russian oil, agreeing with Washington's initiatives to limit revenue to Moscow while mitigating global inflation.
South Korea imported about 5 per cent of its crude oil from Russia last year, according to Korea National Oil Corporation's Petronet.
On North Korea, Dr Yellen had said in an interview on her way to Seoul that the US has further sanctions it could adopt against the country, adding that any nuclear test by Pyongyang would be seen as very provocative.
Concern is growing that North Korea could be preparing to test a nuclear weapon for the first time since 2017, following a record number of missile tests this year, including that of its largest intercontinental ballistic missile.
REUTERS
